1. Technical Field
The embodiments described herein relate to determining or predicting the likelihood of payment defaults in financial transactions.
2. Related Art
Fraud detection systems detect fraud in financial transactions. For example, a mortgage fraud detection system can be configured to analyze loan application data to identify applications that are being obtained using fraudulent application data.
Existing fraud detection systems, however, have failed to keep pace with the dynamic nature of financial transactions and mortgage application fraud. Moreover, such systems have failed to take advantage of the increased capabilities of computer systems.
Additionally, there currently are no effective systems for detecting the probability of payment default, such as early payment default (EPD). EPD, for example, can have a large impact on a lender. Beyond the obvious lost revenue potential, EPD can generally reduce the value of loans in the secondary market. If EPD, as well as longer term defaults, can be reduced or eliminated, then there will be less inherent risk in the loans and the overall value of the loans should increase.